The simple interest on a sum of money invested for a period of 10 years is equal to $\frac{4}{5}$th of the sum invested. What is the rate of simple interest per annum that is being given?
Answer & explanation
Correct answer: option 4
Simple interest is equal to \(\frac{4}{5}\)th of the sum invested.
Simple interest = \(\frac{4}{5}\) × Principal
Simple Interest = \(\frac{Principal × Rate × Time }{100}\)
\(\frac{4}{5}\) × Principal = \(\frac{Principal × Rate × 10 }{100}\)
Rate = 8%